Business

Influence of Internal, Connected and External Stakeholders in An Organization

Internal Stakeholders: Employees and Management

Because employees and management are so intimately connected with the company, their objectives are likely to have a strong influence on how it is run. They are interested in the following issues:
(a) The organization’s continuation and growth. Management and employees have a special interest in the organization’s continued existence.
(b) Managers and employees have individual interests and goals which can be harnessed to the goals of the organization.

Source: ICAEW

Connected stakeholders Increase in shareholder wealth, measured by profitability, P/E ratios, market capitalization, dividends and yield.

External Stakeholders

Connected stakeholders and external stakeholders are both outside the organization. Their difference lies in the degree of connectedness.
 Connected stakeholders supply resources to the organization such as capital or sales revenue.
 External stakeholders do not have this direct connection but rather influence the context in which the organization operates.
External stakeholder groups – the government, local authorities, pressure groups, the community at large, professional bodies – are likely to have quite diverse objectives.

Source: ICAEW

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